Casinos will be China’s cesspools

By Pan Han-shen 潘翰聲

Weidner Resorts Taiwan has released a plan to build a casino resort on Matsu — the small island chain just 16km off the coast of China’s Fuzhou City — catering to people on both sides of the Taiwan Strait, and Hon Hai Group chairman Terry Gou (郭台銘) has proposed a special casino area in New Taipei City’s (新北市) Tamsui District (淡水) to boost the economy.

Gambling-centered tourism could be the last bubble of the Chinese economy, and Taiwanese should ask themselves whether the nation can handle the stakes involved in the bet being wagered by the governments and large corporations in China and Taiwan in setting up a Chinese offshore money laundering zone.

Liberalization and globalization since the 1980s have resulted in deregulation and increasing disregard for morality in public policy. Once the tech and real-estate bubbles burst, multinational corporations have been moving further into the black economy in pursuit of profit, blurring the line between what is legal and what is not.

Turning gambling into a form of tourism is akin to sugarcoating poison.

Local governments are only interested in the immediate benefits and are unwilling to shoulder responsibility for the negative consequences that could result from projects, under-the-table dealings or the reality that these casinos are often impossible to pull off.

Empirical studies from the US show that crime rates are much higher in states where gambling is allowed, and while local governments enjoy increased tax revenue and improved accounts, the concomitant negative social costs make these benefits small compared with the damage caused by gambling.

Such studies also show that many residents in autonomous regions for indigenous peoples have remained poor after casinos have been set up in their homelands.

Many supporters of the gaming industry cite Singapore, but they overlook that Singapore has a high level of social control and a relatively low emphasis on human rights and democracy. Add that information from Singapore may not be transparent, and there is a high possibility that these supporters are overestimating the profits and underestimating the costs of the development of gaming industries.

Most political hacks promoting gambling in Taiwan are members of local governments who have proved themselves politically incompetent. Such people have done nothing to improve standards of living in their local areas and are now saying that casinos will fix these problems.

During the political tug-of-war over gambling that has been going on in the legislature for the past decade, the tacit understanding has been to use the Offshore Islands Development Act (離島建設條例) to open a small window for gambling and then, once a gambling referendum is passed, set up a special gambling act which would open up gambling on Taiwan.

Taiwanese like to gamble and despite the government having established a national lottery, illegal casinos abound.

Illegal gambling will not stop with the establishment of a special gambling zone and even if the government were to prevent Taiwanese nationals from entering the casinos, many have more than one passport. However, the main target for the casinos will be Chinese citizens.

Large amounts of dirty money have been circulating in China over the two decades since it opened up and reformed its economy.